“We set our cost-effectiveness threshold such that we expect to be able to fully fund all the opportunities above a given level of cost-effectiveness. Currently, we generally fund opportunities that we believe are at least 10 times as cost-effective as unconditional cash transfers to people living in poverty (i.e., “10x cash“). But there’s nothing magical about the 10x cash threshold. We’d be very excited to recommend programs that are 6x cash, for example, if we had enough funding—a program that’s 6x cash might save a life for less than $15,000.”
“If we had a very weak Giving Season this year and expected donations to continue lagging, we might have to raise our cost-effectiveness threshold to something like 12x cash and fund fewer programs going forward. In contrast, with exceptionally strong growth in donations we might be able to use a bar of 8x cash, expanding the set of opportunities we can fund.”
The year in question, when they decided to hold some cash for a few months, it was because they had been researching new giving opportunities that were 10x cash and wanted to be able to use the money for that, rather than dropping the bar. (GiveDirectly criticised them for this and said they should’ve effectively lowered their bar to 1x cash in order to use the funds as soon as possible; they thought GiveWell’s decision would be indefensible to the world’s poorest people.)
The section “What more donations will enable” from November 2023 looks relevant. Some excerpts below: https://blog.givewell.org/2023/11/21/givewells-2023-recommendations-to-donors/
“We set our cost-effectiveness threshold such that we expect to be able to fully fund all the opportunities above a given level of cost-effectiveness. Currently, we generally fund opportunities that we believe are at least 10 times as cost-effective as unconditional cash transfers to people living in poverty (i.e., “10x cash“). But there’s nothing magical about the 10x cash threshold. We’d be very excited to recommend programs that are 6x cash, for example, if we had enough funding—a program that’s 6x cash might save a life for less than $15,000.”
“If we had a very weak Giving Season this year and expected donations to continue lagging, we might have to raise our cost-effectiveness threshold to something like 12x cash and fund fewer programs going forward. In contrast, with exceptionally strong growth in donations we might be able to use a bar of 8x cash, expanding the set of opportunities we can fund.”
The year in question, when they decided to hold some cash for a few months, it was because they had been researching new giving opportunities that were 10x cash and wanted to be able to use the money for that, rather than dropping the bar. (GiveDirectly criticised them for this and said they should’ve effectively lowered their bar to 1x cash in order to use the funds as soon as possible; they thought GiveWell’s decision would be indefensible to the world’s poorest people.)
That’s a great link, cheers